Trademark Infringement Test for TV Show Titles Welcome to the Winter 2018 Issue of Kattwalk

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Winter 2018 | Issue 15

Letter From the Editor Trademark Infringement Test for TV Show Titles Welcome to the Winter 2018 issue of Kattwalk. by Karen Artz Ash and Bret J. Danow In this issue, we are excited to In Twentieth Century Fox Television vs. Empire Distribution the provide a look into the work of US Court of Appeals for the Ninth Circuit recently addressed Marc G. Schuback, independent consultant and former senior vice president, general counsel the issue of the appropriate test to apply when an allegedly and secretary of Aéropostale, Inc., as he takes us infringing use is in the title or within the body of an expressive through his career thus far and provides insight work. into online shopping, artificial intelligence and the evolving future of shopping. Empire Distribution, a record label that releases albums in the urban music genre, had sent a demand letter to Twentieth We are also thrilled to bring you updates on the Century Fox Television (Fox) regarding a television show foundation of the fashion world—brand licensing, recent ADA compliance issues, infringement news titled Empire, which portrays a fictional music label named and more! “Empire Enterprises.” In response to such demand letter, Fox commenced a lawsuit seeking a declaratory judgment that the Don’t miss the exciting industry topics in this issue, including additional information on satisfying GDPR Empire television show did not violate Empire Distribution’s compliance. Read on to learn more. trademark rights. Empire Distribution, in turn, counterclaimed for trademark infringement under the Lanham Act, among Karen Artz Ash other causes of action.

In This Issue •

Trademark Infringement Test for TV Show Titles The district court granted summary judgment in favor Christian Louboutin’s Red-Sole Legacy of Fox, holding that Fox’s use of the name Empire was Through the Lens: Q&A With Marc G. Schuback protected by the First Amendment and, as such, outside Karen Artz Ash Named to Leading Women Lawyers the reach of the Lanham Act. Empire Distribution List by Crain’s New York Business appealed such decision to the Ninth Circuit.

Fashion Licensing: Lessons From • the Courtroom In reviewing the district court’s decision, the Ninth Circuit noted Website Accessibility and The Americans With that, generally, Lanham Act claims of trademark infringement Disabilities Act are governed by a likelihood of confusion test. However, when Staying In Vogue the allegedly infringing use is in the title of an expressive Easy Guide to GDPR Compliance work (such as, in the case at hand, a television program), the court first applies the Rodgers two-prong test to determine whether the Lanham Act is applicable. The court explained that expressive works are treated differently because: “(1) they implicate the First Amendment right of free speech, which must be balanced against the public interest of avoiding consumer confusion; and (2) consumers are less likely to mistake the use of someone else’s mark in an expressive work for a sign of association, authorship or endorsement.”

Under the Rodgers test, a television show title does not violate the Lanham Act “unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” In applying the Rodgers test, the court found that Fox’s use of the name Empire satisfied both prongs.

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First, the court determined that Fox used the word Empire for artistically relevant reasons—noting that the level of relevance does not need to be high—since the television show is set in New York (known as The Empire State), and its subject matter is a music and entertainment conglomerate (a figurative empire).

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Second, the court found that Fox’s use of the title did not explicitly mislead consumers, indicating that it contains no overt claims or explicit references to Empire Distribution and no explicit misstatement that caused consumer confusion. In analyzing the second prong, the court held that “use of a mark alone is not enough” and that they must ask not only about the likelihood of consumer confusion, but whether the creator explicitly misleads consumers.

The court also dismissed Empire Distribution’s arguments that Fox’s use of the Empire mark “as an umbrella brand to promote and sell music and other commercial properties” falls outside the title of an expressive work and, therefore, outside the Rogers test. The court noted that “it requires only a minor logical extension of the reasoning of Rogers to hold that works protected under its test may be advertised and marketed by name.”

This decision is instructive for media companies when developing content.

2 www.kattenlaw.com/fashionlaw Christian Louboutin’s Red-Sole Legacy Louboutin Hits Back by Alan Meneghetti and Sarah Simpson Interestingly, since publication of the AG’s opinion, Louboutin has (in a very rare move) spoken out in defense of headlines Christian Louboutin has been creating and selling his legendary such as the New York Times’ “Can Christian Louboutin scarlet soles for more than 25 years. Way back in the nineties, Trademark Red Soles? An EU Court Says No.” while Louboutin designed a black shoe for a client, he looked over at his assistant painting her nails with Chinese Red nail varnish. Louboutin claims that some reports of the opinion are “fake Louboutin immediately reached for the polish and painted news,” commenting “While ordinarily Christian Louboutin the soles of his Pensée stilettos the now renowned red! Since does not comment directly on pending matters, we are making exclaiming his new discovery made the shoes “pop,” the Paris an exception in this instance to correct what appears to be shoe salon has sought to fiercely protect its signature style. misleading reports of the opinion of M. Szpunar, advocate general, which is seen to impact our trademark adversely. Fifth Avenue by Halle Berry We disagree.” In fact, Louboutin is of the view that the AG’s Fast forward from Louboutin’s nineties heyday to 2012, and the opinion “supports trademark protection for our famous red French fashion designer’s headache begins when the Dutch sole, rather than threatening it.” shoe retailer Van Haren launched its Fifth Avenue by Halle Berry Louboutin seems to take this stance since “Advocate General collection. This particular line included red-soled stilettos. To Szpunar states that the concept of a shape which ‘gives stand up for his figurative Benelux trademark, Louboutin put substantial value’ to the goods . . . relates only to the intrinsic his foot down and claimed the Van Haren line infringed his mark value of the shape, and does not permit the reputation of the consisting of “…the red color (Pantone 18-1663TP) applied on the mark or its proprietor to be taken into account.” sole of a shoe…,” which has afforded protection in Belgium, the • Netherlands and Luxembourg for almost a decade. The District Court in the Hague concurred. In other words, “Applying Mr. Szpunar’s opinion to After being forced to stop producing its red soles, Van Haren our case supports the validity of our trademark since struck back, arguing that Louboutin’s Benelux trademark is the shape of the outsole to which the red color is invalid, since EU law prohibits trademarks that only consist of a applied is not intrinsically valuable . . . “shape that gives substantial value to the goods,” and the case was referred to the European Court of Justice (ECJ), for “clarity.” • As for Christian Louboutin’s red color, the only reason it Spring 2018 Update has value is because of our marketing efforts as well as the Almost six years later, Louboutin and Van Haren are still thrashing public’s association of such color applied to a women’s heeled it out in the courts. On Tuesday February 6, 2018, the most recent shoe outsole with Christian Louboutin.” development came when the ECJ’s Advocate General (AG), Maciej In fact, the super-brand claims that the “opinion is not a blow Szpunar, declared that a shape trademark can include color and, or a setback in Christian Louboutin protection of its famous therefore, since a trademark consisting only of a shape that gives red sole mark but is ultimately reinforcing our rights.” substantial value to the goods for which it is registered is not allowed, Louboutin’s Benelux trademark could be ruled invalid. It Is All About The Interpretation—Will The Tables Turn To add insult to injury over Louboutin’s 25-year red-sole stint, AG in Favor of Louboutin? Szpunar also added that any decision on the trademark’s validity Is Louboutin right to interpret the AG’s opinion in this way? should not consider the “attractiveness of the goods flowing from Arguably, yes. The red-soled stiletto may live to fight another the reputation of the mark or its proprietor.” day, but we will have to await the outcome of the ECJ to know However, this is not the end of the road for Louboutin. The court whether this turns out to be the case. still needs to deliver its decision on the referral, which may or may Stay tuned to the Katten Kattwalk for future updates on this case, not necessarily follow the opinion of AG Szpunar. The opinion of which is sure to be of huge interest to fashion brands looking to the AG is only guidance for the ECJ, although in the vast majority protect their signature styles as trademarks in Europe. of cases, the opinions are followed.

3 Through Q&A the Lens With Marc G. Schuback Independent Consultant; Former Senior Vice President, General Counsel and Secretary of Aéropostale, Inc.

––––––––––––––––––––( insight )––––––––––––––––––––

Tell us about your background.

My entire in-house career has been in the retail industry. After practicing corporate and real estate law at the law firm of Graham & James LLP, I started my in-house career at Melville Corporation, which at the time was one of the largest retailers in the US whose businesses included, CVS, Marshall’s, Linens ‘N Things, Meldisco, Kay-Bee Toys, Footaction and Thom McAn, among others. Thereafter, I transitioned to the role of Vice President, Assistant General Counsel and Assistant Corporate Secretary at Footstar, Inc., which was the footwear spin-off from Melville Corporation, and where I was for a little over 11 years. This led me to my next role as Senior Vice President, General Counsel and Secretary at dELiA*s, Inc. which was a specialty apparel brick and mortar, e-commerce and catalog retailer. Following dELiA*s, I was Senior Vice President, General Counsel and Secretary of Aéropostale, Inc. and helped take them through their Chapter 11 bankruptcy process and the subse- quent sale of their assets to a consortium consisting of Simon Property Group, General Growth Properties and Authentic Brands Group. I am currently an independent consultant to the successor to Aéropostale’s store and e-commerce businesses.

––––––––––––––––––––( focus )––––––––––––––––––––

What’s the most rewarding aspect of your work?

Generally, the most rewarding aspect of my work is that I get to work collaboratively with all areas of the organization on transactions and projects that help to achieve the organization’s goals. In addition, I enjoy that each day is different, and I never know what is going to come through the door. Specifically, one of the most rewarding aspects of the work I did at Aéropostale was completing the successful sale of its assets, saving approximately 10,000 jobs and keeping approximately 500 stores open.

4 www.kattenlaw.com/fashionlaw ––––-––---––––––––––( highlight )–––––---–--––––––––– online through whatever device the customer utilizes; being able to ship out-of-stock items at a brick and mortar store What are the industry’s strongest areas at the moment? from a retailer’s online store for free; purchasing online and picking up in store; reserving online and trying on in store; Brand recognition is a strong area, especially with brands and accepting returns/exchanges from online purchases in utilizing technology and social media to engage with customers stores. It is also important to use data and analytics to know and promote brand awareness. the customer’s preferences, so retailers can provide their customers what they want, how they want it and when they –––––––––––––--–––––( challenge )–––––––--––––––––––– want it.

What do you think are the greatest challenges facing ––––––––-––––-–––––( innovation )–––––––-–––––––––––– the industry today? Given these multi-channel sales, have you seen the The ever-changing face of retail and the ability of retailers to shopping experience become more customized to the adapt is the biggest challenge. For example, although reports say that approximately 85 percent of retail transactions are individual? conducted in brick and mortar stores, the increasing percentage As retailers have more data and analytics at their disposal, of transactions being conducted online and Amazon’s presence the shopping experience is becoming more customized to the have required retailers to adapt in order to survive and succeed. individual. Retailers are continuing to make this happen by Another significant challenge for retailers is brand protection. utilizing technology and learning more about the individual customer at each touchpoint. One developing technology –––––––––------–––––( integration )––––----–-–-––-–––––– that will have the ability to add to customization is artificial intelligence. How do you see your field changing in the future? And how are you preparing to meet the evolving needs of the field?

To meet the evolving needs of the industry, retailers need to focus on understanding customer engagement and the methods customers use to engage with a retailer/brand, and then imple- menting an omni-channel experience—making it easy to shop

5 Karen Artz Ash Named to Leading Website Accessibility and The Americans With Women Lawyers List by Crain’s New Disabilities Act York Business by Jonathan Faust

Karen Artz Ash was named to Many commercial websites cannot easily be accessed by people the "Leading Women Lawyers with visual, auditory, motor and/or cognitive impairments. in NYC" list by Crain's New York Businesses that fail to proactively ensure that their websites meet Business for her contribution to current standards for accessibility should brace for lawsuits in the the legal industry. As national United States.

co-chair of Katten's Intellectual Property A growing number of lawsuits claim that websites that are not department and co-head of the Trademarks and reasonably accessible to the disabled violate the US Americans Trademark Litigation practice, Karen is credited With Disabilities Act (ADA). (See e.g., “McDonald’s, Kmart, Others for her extensive work for the fashion industry, Settle Suits Over Website Access for the Blind,” Chicago Tribune, particularly involving intellectual property and November 6, 2017, which describes four lawsuits brought by trademark licensing. She is also recognized for the same law firm on behalf of the same group of plaintiffs). her contributions as an academic, noting her Accessibility concerns have most commonly been raised regarding public facing websites by which users engage in transactions or writing for The Licensing Journal and Managing receive goods and services. However, accessibility concerns have Intellectual Property, in addition to several books. also been cited respecting employee intranets and web pages advertising job offerings to the public.

The ease and ubiquity of internet searches means that the disabled often encounter frustrating websites. In addition to those persons genuinely aggrieved by a difficult website experience, there are many recurring plaintiffs who look to manufacture litigation in order to effectuate change and/or extract settlement payments. Such Fashion Licensing: Lessons From plaintiffs can be represented by a growing industry of attorneys the Courtroom who can quickly file cookie-cutter complaints, often targeting entire industry sectors. by Karen Artz Ash, Alexandra Caleca and David Sherman • The fashion world is built substantially on a foundation of brand licensing. While some companies While the current litigation has tended to target large, and design houses have very sophisticated well-known retailers, business should expect these licensing partners, there is no question that lawsuits to proliferate and reach small and mid-market virtually any license can be improved. In fact, companies. many licenses contain language that may create • unforeseen issues. Often these issues are identi- fiable only in litigation. Significantly, under current law, businesses can be sued for website accessibility violations without prior notice. In other words, a Lawyers and business executives who negotiate business might first find out about an ostensible website accessi- brand licenses rarely have a glimpse into the bility concern by reviewing a demand letter or even a formal legal courtroom. However, lessons from the courtroom complaint filed against it. Reacting to such a claim means that, put meaning behind the words. There is no better in addition to the expense and distraction of litigation, accessibil- contract than one negotiated by someone who ity issues get resolved with plaintiff’s counsel’s oversight, on the understands the effective lessons taught by liti- plaintiff’s timeline. The public profile of such litigation can expose gation. >>read more a business to potential government enforcement actions as well.

6 www.kattenlaw.com/fashionlaw There are compelling non-litigation reasons for a company to promptly take steps to make its websites more accessible to the disabled. Making it easier for more customers to find, engage and buy from the business is often its own reward. Likewise, it is easier for a business to retain customers as they age, if the company website is accommodating to those with diminished eyesight, hearing and motor skills. Adhering to enhanced website accessibility standards might also improve search engine opti- mization, making the company’s website higher profile during routine internet searches. In addition, pre-emptively ensuring website accessibility can reinforce a business’ reputation as a good corporate citizen.

Business can take pre-emptive action by modifying their websites to add:

(1) Captions and transcriptions of multimedia content on the site;

(2) Spoken descriptions of photos;

(3) Options to navigate online pages without using a mouse; and

(4) Features that enable the website to work with mass-market screen readers.

Addressing web accessibility proactively lets a business (not a plaintiff’s counsel) take charge. Website reconfiguration (and ultimately, replacement with a site that is “accessible by design”) and attendant issues such as testing, training and maintenance, can be appropriately budgeted, staffed and planned within the business and financial structures of the company.

There is no single, formal web accessibility standard that can be referenced. However, the World Wide Web Consortium (W3C) sponsors the Web Accessibility Initiative (WAI), which provides a widely respected set of website accessibility guidelines, technical reports, educational materials and other documents that relate to different components of web accessibility. Many private litigation settlement agreements provide that the offending website should be reconfigured to meet the WAI guidelines. Accordingly, website owners should consider proactively redesigning their sites to conform to WAI guidelines.

Skilled counsel can assist you in evaluating the case, controlling the cost of any resolution, and making tactical decisions on how to comply with web accessibility concerns. The up-front invest- ment in time, effort and money will result in reduced litigation and compliance risk, lower long-term costs, and increased business from disabled customers.

7 Staying In Vogue

by Alan Meneghetti, Sarah Simpson and Emma Phillpot

Vogue magazine is regarded by many as an international fashion has a reputation in the UK (HUGE check). Advance Publications bible synonymous with glamour, luxury and celebrity. Recently, would also have to show that use of the mark by the nightclub however, Vogue made UK headlines because of its ongoing takes unfair advantage of, or is detrimental to, the distinctive trademark battle with the owners of Vogue, a nightclub in character or reputation of the Vogue mark (if established, then Burnley. Burnley is a UK Lancashire mill-town, located 250 miles CHECK-MATE). north of London. Advance Publications, Vogue’s parent company, The remedies potentially available to Advance Publications is pursuing the club for infringing its registered trademark. include injunctions, damages and/or an account of profits, This ongoing dispute is a salient reminder of the importance of orders for removal of the offending signs from infringing protecting your trademark from infringement, however minor the articles, and orders for destruction of infringing articles. With a threat may seem to be, to protect your brand’s credibility and limit reported turnover of $2.4 billion, it is highly unlikely that Advance the risk of dilution from those trying to infringe it. Publications would pursue the McQuoids for monetary com- pensation; rather, the company would be more concerned with Know Your Value obtaining a remedy to protect its brand, such as an injunction to Vogue’s financial success is largely measured by its advertising stop the nightclub from using the trademark. revenue. In 2017, it cost £28,020 to place a single page advertise- While the dispute remains ongoing, Advance Publications is in ment in the print edition of British Vogue, which is almost £10,000 a strong position because the trademark in question has been more than it cost to advertise in its rival, Harper’s Bazaar. Vogue’s properly registered. Vogue and Advance Publications have advertising space is valuable because of the reputation of the received some negative press as a result of this dispute—some magazine and the power of the brand. This value is largely tied up think that the global juggernaut is bullying the “little guy.” This in the name VOGUE. It is therefore understandable that Advance minor criticism is, however, somewhat inevitable given the dif- Publications moved to protect the strength and value of their reg- ference in size of the parties and is, arguably, not one which istered trademark when it came to light that a somewhat noisier should—or indeed will—put Advanced Publications off enforcing namesake existed in Burnley. what it regards as its rights. Vogue, Burnley’s current predicament, isn’t the first law that the Discovering Infringement: First Steps owners of the club, the McQuoids, have run afoul of in recent years. In 2016, they reportedly settled with music licencing Should you discover that your trademark has been infringed, company PPL in relation to outstanding licencing fees, eventually contact a lawyer and take the following initial steps to ensure paying a sum of £20,000. A number of violent incidents have also that the grounds for any infringement case are clear: reportedly taken place in or outside the club. These varying issues 1) Record the date and circumstance of the discovery of are clearly something that a bastion of cultural commentary, such potential infringement; as Vogue would not want to be associated with, even if, as club co-owner Jason McQuoid said, “no one’s going to think Kate Moss 2) Identify the person who discovered the potential is in Vogue in Burnley!” infringement;

3) Identify the business details of the infringer; and The Fashion Police Strike 4) Obtain a sample of any infringing product and retain the Advance Publications has accused the McQuoids of infringing its invoice. registered EU trademark for Vogue in the context of “nightclub services,” The McQuoids have been forced to change the club’s It is important to take swift action once infringement has come to name on Twitter and the club’s Facebook page has been shut down. light and the facts have been established, as delay can mean that These steps prove that Advance Publications is serious about certain remedies could be lost. It is also important to ensure that enforcing its rights as proprietor of the registered trademark. your trademark is correctly registered, that any period of use prior to registration is documented, and that you keep records Under English law, if Advance Publications issued infringe- that can be used to show that the trademark in question was in ment proceedings, it would have to prove that the sign used by the McQuoids is identical or similar to Advance Publications’ use prior to registration. registered trademark (check) and that the Vogue trademark

8 www.kattenlaw.com/fashionlaw Easy Guide to GDPR Compliance With privacy and data breaches on the increase in our data-driven world, it is important to take the necessary steps to protect your business. But many times complying with the General Data Protection Regulation (GDPR) can be confusing, and it may be difficult to determine just where to start on your path towards compliance. That is why we have created a simple step-by-step guide help ensure that you are headed in the right direction.

10 Steps to GDPR Compliance:

9 Personal Data Checklist: The What, the Where and the Who: To help you map your data flows, here is a checklist to help you decide what personal data you might hold, where you get it from and who it relates to.

10 www.kattenlaw.com/fashionlaw Processing Personal Data Legally: Before requesting personal data from your customers, your suppliers and your employees, always consider why you need it. “Just because” is unlikely to cut it!

11 The Katten Kattwalk

If you have questions about the GDPR or about the topics covered in the preceding pages, please contact any of the following Katten attorneys:

Christopher Hitchins Doron S. Goldstein +44 (0) 20 7776 7663 +1.212.940.8840 [email protected] [email protected]

Alan D. Meneghetti Matthew R. Baker +44 (0) 20 7770 5232 +1.415.293.5816 [email protected] [email protected]

Sarah Simpson Joshua A. Druckerman +44 (0) 20 7770 5238 +1.212.940.6307 [email protected] [email protected]

Brigitte Weaver +44 (0) 20 7770 5235 [email protected]

For more information, contact: Karen Artz Ash CLICK HERE TO VIEW PREVIOUS ISSUES Partner and National Co-Chair | Intellectual Property Department | Katten Muchin Rosenman LLP +1.212.940.8554 | [email protected] | 575 Madison Avenue | New York, New York 10022 Katten is a full-service law firm with one of the most comprehensive fashion law practices in the nation. We provide innovative advice on the legal and business issues faced by national and international manufacturers, designers, marketers, licensors, licensees and retailers of fashion items including a full range of apparel, footwear, jewelry, cosmetics and luxury goods.

©2018 Katten Muchin Rosenman LLP. All rights reserved. Katten refers to Katten Muchin Rosenman LLP and the affiliated partnership as explained at kattenlaw.com/disclaimer. Attorney advertising. Published as a source of information only. The material contained herein is not to be construed as legal advice or opinion.